NEXT PUBLICATION DATE: MAY 2, 2003 Volume 1 Issue 4 TM SSR Web Site: www.stocksuperstars.com • SSR Telephone Hotline: 877-281-7680 Dec 2001 Feb 2002 Apr 2002 Jun 2002 Aug 2002 Oct 2002 Dec 2002 Feb 2003 $70,000 $80,000 $90,000 $100,000 $110,000 $120,000 Growth of $100,000 PERFORMANCE OF SSR VS. WILSHIRE 5000 IN T T T T THIS HIS HIS HIS HIS I I I I ISSUE SSUE SSUE SSUE SSUE Performance of SSR vs. Wilshire 5000 ......... 1 Portfolio Actions This Month ....................... 2 Total Return Table: SSR vs. Indexes ............ 2 Benchmark Charts .......................................... 3 SSR Stocks in the News .................................. 3 Recent Earnings Announcements ............... 4 The Current SSR Portfolio ............................. 6 In-Depth Stock Reports Biosite Incorporated .................... 8 Friedman’s Inc. .............................. 9 Cooper Companies .................... 10 Fresh Del Monte Produce .......... 11 APRIL 2003 New Pick New Pick New Pick Buffeted by uncertainty over the path of the economy and distracted by the confrontation in Iraq, stocks ended the quarter down. The housing industry and mortgage rates remained bright spots, but employment, corporate profit and manufacturing numbers still seemed dim, and the prospects for elimination of the taxation on divi- dends declined. In all, the storm front of uncertainty hovering over the market hardly diminished and any corporate or industry news that wasn’t extraordinarily good, walloped individual stocks and the market. While the market may be under a cloud, plenty of stocks have been solid and getting stronger even in a weak market. There are four SSR buy recommendations for April: Biosite Incorporated (BSTE) for Group 1, Friedman’s Inc. (FRDM) for Group 2, Cooper Companies (COO) for Group 3, and Fresh Del Monte Produce (FDP) for Group 4. Biosite engages in medical research that it converts into testing products to aid doctors in diagnosing disease. These diagnostic tests are designed to simplify laboratory medicine and detect such conditions as cardiac problems, drug abuse, and parasites. As a Group 1 recommendation, Biosite has demonstrated the ability to grow earnings while exhibiting strong relative price strength. Fully diluted earnings per share from continuing operations have grown at over 50% a year annually over the last five years with trailing 12-month earnings at $0.86 per share. The Group 1 screen also seeks smaller firms and while the market capitalization of Biosite is $575 million, it is listed on the Nasdaq National Market. Friedman’s Inc. fits the Group 2 profile: reasonable price multiples, positive earnings growth, a history of New Pick
11
Embed
Volume 1 Issue 4...Earnings Reports Group 1 3/25/2003—LNR Property Corp. (LNR) reported record net earnings for its first quarter ended February 28, 2003, of $34.8 million, or $1.06
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
NEXT PUBLICATION DATE: MAY 2, 2003
Volume 1 Issue 4
TM
SSR Web Site: www.stocksuperstars.com • SSR Telephone Hotline: 877-281-7680
Dec 2001 Feb 2002 Apr 2002 Jun 2002 Aug 2002 Oct 2002 Dec 2002 Feb 2003
$70,000
$80,000
$90,000
$100,000
$110,000
$120,000
Growth of $100,000
PERFORMANCE OF SSR VS. WILSHIRE 5000
IIIIINNNNN T T T T THISHISHISHISHIS I I I I ISSUESSUESSUESSUESSUE
Performance of SSR vs. Wilshire 5000 ......... 1
Portfolio Actions This Month ....................... 2
Total Return Table: SSR vs. Indexes ............ 2
$2.05 -1.1% 20.8% 28.8% 2.63 2.8 0.4% $935 $17.7 health care prods including contacts & diag equip$1.31 22.1% 20.0% 312.4% 1.99 3.5 0.0% $391 $3.8 recycles coal & steel waste into fuel & revert mat'ls$1.08 66.2% 25.3% 32.1% 1.99 3.0 0.0% $297 $4.0 special care servs to health plans & hospitals$0.96 24.0% 18.1% 25.0% 4.29 2.9 0.0% $2,030 $9.0 oncology & injectable specialty pharmaceuticals$1.41 25.2% 28.5% 29.7% 3.07 2.3 1.5% $1,247 $2.8 holding co for Puerto Rican bank$1.97 85.1% 24.8% 28.2% 5.19 4.1 0.0% $1,123 $14.3 OTC & prescription pharmaceuticals$3.58 32.0% 22.5% 27.0% 6.11 3.3 1.6% $2,551 $12.3 holding co for Puerto Rican bank$2.01 20.2% 15.6% 17.5% 6.82 nmf 0.4% $6,883 $35.2 global credit rating, research & risk analysis $2.18 27.6% 20.5% 27.0% 1.68 2.6 0.0% $6,022 $70.6 information technology services$2.09 27.5% 14.0% 26.9% 1.72 2.9 0.0% $1,514 $6.3 nephrology services for kidney patients$2.81 25.3% 14.0% 29.7% 2.27 1.7 1.8% $747 $1.3 holding co for Puerto Rican bank & mortgage co
$3.72 30.5% 8.3% 7.6% 0.41 1.1 2.6% $866 $6.3 produces, distributes and markets fresh produce$8.53 27.7% 14.9% 15.4% 0.39 1.3 0.3% $3,391 $59.7 home builder operating in 25 states$1.29 10.0% 13.7% 16.2% 0.80 1.3 0.0% $366 $2.2 hair accessories & dryers, body massagers$1.24 27.1% 18.3% 13.2% na 4.2 2.0% $78 $0.3 ceiling fans and related prods$0.96 5.2% 12.5% 18.9% 0.26 0.7 0.0% $70 $0.1 automated Internet supply chain mgmt prod$3.50 36.7% 5.0% 20.2% 0.26 0.8 0.0% $407 $1.3 title insurance on homes & other real estate
na -17.8% na 3.2% 0.68 1.3 3.5% $578 $1.4 holding co for Tucson Electric & Millennium Energy
American.
Growth Rate
8 APRIL 2003
Stock Superstars Report
SSR Group 1: Biosite Incorporated (BSTE) $38.41 ($39.95 - $17.35)
Group 1: Profitability & Relative StrengthDate Recommended: 4/4/2003Recommended Price: Closing Price on 4/4/2003Primary Industry: Biotechnology & DrugsRiskGrade: 197Market Cap: $575.2 MilAvg Daily Dollar Volume: $20.2 MilBiosite Incorporated (BSTE) is a research-based diagnosticscompany dedicated to the discovery and development of
protein-based tests that improve a physician's ability to
diagnose disease. The company combines separate, yet
integrated, discovery and diagnostics businesses to access
proteomics research, identify proteins with high diagnostic
utility, develop and commercialize products and educate the
medical community on new approaches to diagnosis. The
company's diagnostic products include its Triage Drugs of
Abuse Panel and Triage TOX Drug Screen, single-sample urine
tests that identify commonly abused drugs. Its Triage "C.
difficile" and Triage Parasite Panels detect intestinal parasites
and other pathogens. The company's Triage BNP Test aids indiagnosing congestive heart failure. Fisher Scientific, which Multiples Current 12/2002 12/2001 12/2000 12/1999 12/1998distributes many of Biosite's products in the US, accounts for Price/Earnings 44.7 28.7 80.6 119.2 1,555.5 nmf more than 80% of company sales. The Biosite Discovery Price/Book Value 5.6 3.5 5.6 9.2 2.8 2.5program is a collaborative research effort to identify new Price/Sales 5.8 3.6 7.7 12.1 3.7 3.7protein markers for diseases. Price/Cash Flow 35.3 28.7 49.9 70.8 35.5 38.1BSTE passed the Group 1 screen, which looks for smaller Price/Free Cash Flow nmf nmf 36.2 nmf nmf nmf companies with a proven record of earnings growth showing Yield (%) 0.0 0.0 0.0 0.0 0.0 0.0strong relative price strength. BSTE has a current P/E ratio of Ratios Current 12/2002 12/2001 12/2000 12/1999 12/199844.7 based on trailing 12-month EPS of $0.86. The consensus Gross Margin (%) 70.0 70.1 73.2 71.6 68.9 71.7earnings estimate for the 2003 fiscal year is $1.42 and $1.74 Operating Margin (%) 18.1 18.1 12.0 13.8 (2.1) (13.2)for the 2004 fiscal year. The most recent quarterly earnings Net Margin (%) 12.7 12.7 10.2 11.3 2.5 (3.0)came in at $0.31, which was in line with expectations, and was ROE (%) 13.4 13.5 8.2 9.6 2.0 (2.0)287.5% higher than the same quarter a year earlier. Earnings ROA (%) 11.3 11.5 7.2 8.2 1.6 (1.7)and revenues have increased steadily over the last five years. Current Ratio (%) 5.5 5.5 8.9 9.4 6.6 6.8Historically, earnings have grown at an annual rate of 57.1% Payout Ratio (%) 0.0 0.0 0.0 0.0 0.0 0.0over the last five years, and the consensus three-to-five year Liabilities to Assets (%) 17.7 17.7 11.5 12.2 16.6 16.9earnings growth rate estimate is 30%. BSTE's stock price has Asset Turnover (X) 0.9 0.9 0.7 0.7 0.7 0.6outpaced the S&P 500 index by 108% over the last 52 weeks Financial Statements TTM 12/2002 12/2001 12/2000 12/1999 12/1998and has outperformed 95% of all stocks. Sales ($M) 105.2 105.2 65.6 55.0 43.7 37.1
Source: AAII Stock Investor Pro, Market Guide and I/B/E/S. Data as of 3/31/2003.
Friedman's Inc. (FRDM) is the #3 retail jewelry chain in the U.S., behind Zale’s and Signet’s Sterling Jewelers. The company operates 650 Friedman's Jewelers stores in 22 states, mostly in the southern and eastern US; most stores are located in shopping centers anchored by mass merchandisers such as Wal-Mart or Target. The company offers its customers competitive prices, a broad selection of merchandise and a high level of customer service. It targets low- to middle-income consumers, ages 18 to 45, and provides them with a selection of diamonds, gold, gemstones and wedding-related items tailored for their market. The company's credit programs are an integral part of its business strategy. Friedman's generated approximately 53% of its net merchandise sales in fiscal 2002 through its proprietary credit program. The company's credit customers are encouraged to make monthly payments in person at the store, allowing sales associates to build personal relationships with its customer base and encourage additional purchases on a more frequent basis.
Friedman's passed the Group 2 screen, which looks for reasonable price multiples relative to interest rates, positive earnings growth, a history of dividends, and reasonable liquidity and debt. FRDM has a current P/E ratio of 6.8 based on current EPS of $1.42. The consensus earnings estimate for fiscal year 2003 is $1.47, and is $1.67 for the 2003 fiscal year. The most recent quarterly earnings came in at $1.14 on a normalized basis, which exceeded expectations by 3.6%. However, it was 9.5% below normalized EPS for the same quarter one year ago. Historically, earnings have grown at a 5.8% annual rate over the last three years. The consensus expected long-term growth rate is 15%. Freidman's current dividend yield is 0.9%. Friedman's percentage of liabilities to assets is 41.5%, below the 58.4% median for its industry.
Apr1998
Oct1998
Apr1999
Oct1999
Apr2000
Oct2000
Apr2001
Oct2001
Apr2002
Oct2002
$0
$5
$10
$15
$20
$25
AprilSSR.p65 4/4/2003, 9:53 AM9
10 APRIL 2003
Stock Superstars Report
SSR Group 3: Cooper Companies (COO) $29.90 ($31.47 - $19.18)
Group 3: Earnings MomentumDate Recommended: 4/4/2003
Recommended Price: Closing Price on 4/4/2003Primary Industry: Medical Equipment & Supplies
RiskGrade: 182
Market Cap: $934.8 Mil
Avg Daily Dollar Volume: $17.7 Mil
Multiples Current 10/2002 10/2001 10/2000 10/1999 10/1998
Source: AAII Stock Investor Pro, Market Guide and I/B/E/S. Data as of 3/31/2003.
Cooper passed the Group 3 screen, which seeks out companies with strong sales and earnings growth, a reasonable price-earnings ratio given the company's growth rate, and relatively strong price action. COO has a current price-earnings ratio of 17.5 based on a trailing 12-month earnings per share of $1.71. The consensus earning estimate for the 2003 fiscal year is $2.05, and is $2.45 for fiscal year 2004. Earnings have grown at 26.8% annually over the last three years, while revenues have grown 28.8% annually over the last five years. The consensus annual earnings growth rate is 20.8% over the next three to five years. COO’s stock price has outperformed the S&P 500 index by 70% over the last 52 weeks and it has outperformed 90% of all U.S.-traded stocks during the same time frame.
The Cooper Companies (COO) operates through its subsidiaries as a developer, manufacturer and marketer of healthcare products. Through CooperVision (CVI), the Company develops, manufactures and markets a broad range of contact lenses for the worldwide vision care market. It specializes in toric lenses that correct astigmatism, cosmetic lenses that change the appearance of the color of the eye and other lenses, primarily sold to high-growth, specialty and value-added market segments worldwide. Its products are disposable and planned replacement toric and spherical lenses. Subsidiary CooperSurgical (CSI) specializes in the women’s health care market and markets medical devices, diagnostic products, surgical instruments and accessories used primarily by gynecologists and obstetricians. The company markets its products through its own sales representatives in North America, distributors in Japan, and a mixture of both throughout Europe.
Apr
1998
Oct
1998
Apr
1999
Oct
1999
Apr
2000
Oct
2000
Apr
2001
Oct
2001
Apr
2002
Oct
2002
$0
$5
$10
$15
$20
$25
$30
$35
AprilSSR.p65 4/4/2003, 9:53 AM10
APRIL 2003 11
Stock Superstars Report
SSR Group 4: Fresh Del Monte Produce (FDP) $15.25 ($29.70 - $14.71)
Group 4: Reasonably Priced GrowthDate Recommended: 4/4/2003Recommended Price: Closing Price on 4/4/2003Primary Industry: Consumer Non-CyclicalRisk Grade: 217Market Cap: $865.7 MilAvg Daily Dollar Volume: $6.3 Mil
Multiples Current 12/2002 12/2001 12/2000 12/1999 12/1998
Source: AAII Stock Investor Pro, Market Guide and I/B/E/S. Data as of 3/31/2003.
Fresh Delmonte Produce passed the Group 4 screen, which looks for a combination of low price-earnings ratios, solid earnings growth forecasts, strong record of sales growth, and strong profitability relative to the industry norm. FDP has a current price-earnings ratio of 4.3 based on a trailing 12-month earnings per share of $3.58. Looking forward, the consensus earnings estimate for fiscal year 2003 is $3.72 and for 2004 is $3.88. Historically, earnings have grown at 30.5% annually while revenue has grown 7.6% annually over the last five years. The consensus annual earnings growth rate is 8.3% over the next three to five years. Free cash flow per share has risen over each of the last three years, as has the company's operating margin which, at 10.3%, is above the industry median of 6.1%.
Fresh Del Monte Produce (FDP) is primarily engaged in the worldwide sourcing, transportation and marketing of fresh and fresh-cut produce. While no longer related to Del Monte Foods, the company holds the license to use the name on fresh fruit that it grows, transports, and markets. The company's products include bananas, pineapples, cantaloupe, honeydew, watermelons, grapes, non-tropical fruits (including citrus, apples, pears, peaches, plums, nectarines, apricots and kiwi), plantains, Vidalia sweet onions and various greens. In January 2003, the company added tomatoes, potatoes and onions to its product offering. The company sources its products primarily from Central and South America and the Philippines as well as from North America, Africa and Europe and distributes its products in Europe, the Asia-Pacific region and South America. Non-produce businesses include third-party ocean freight containers, third-party plastics and box manufacturing, Jordanian